Socialize

GT Bank reports Le46.15bn profit

August 3, 2018

By Hassan Gbassay Koroma

Directors of GTBank at the 17th AGM held at the Hub Hotel, Freetown

Guaranty Trust Bank yesterday held their 17th Annual General Meeting at the Hub Hotel, Wilberforce, in Freetown. According to directors, the bank raised Le46.15 billion profit after tax for the 2017 financial year.

Guaranty Trust Bank Sierra Leone is a subsidiary of Guaranty Trust Bank PLC in Nigeria, which is a wholly owned and managed Nigerian banking institution with a branch network that covers over 200 locations in Nigeria and subsidiaries in Ghana, Gambia, Liberia, Ivory Coast, Kenya, Rwanda and the United Kingdom.

Speaking at the AGM, Chairman Board of Directors, Dr. Emerson George Taylor-Lewis, said that the Sierra Leone’s economic growth slowed down from 6.3% in 2016 to 4.3% in 2017 due largely to weak recovery in mineral production.

He said inflationary pressures intensified due to high volatility of the exchange rate and the tight monetary policy stance of the Bank of Sierra Leone (BSL).

He said fiscal out turn deteriorated in 2017 due to a shortfall in revenue mobilisation and spending overruns in all the major expenditure categories.

Lewis said the Bank of Sierra Leone reduced the local liquid assets ratio at 60% from 70% and retained Cash Revenue Ratio (CRR) at 12%, while the Monetary Policy Rate (MPR) was increased to 14.5%,with inflation rate in the fourth quarter of 2017 rising to 19.18 from 17.4% in fourth quarter 2016.
He said the official exchange rate depreciated by 4.3% between December 2016 and December 2017 as the Leone continues to depreciate against all major foreign currencies.

He said the Leones depreciated to Le7, 536.96 per $1 in the parallel market at the end of fourth quarter 2017 against Le7, 225 per 1$ at the end of the fourth quarter of 2016, thus triggering cumulative depreciation to 52.26 percent since 2014, when global community prices started falling.

He said the 91 days treasury bills averaged at 7.40% in the fourth quarter of 2017, as opposed to 6.25% in fourth quarter 2016, and 2.65% in third quarter 2017.

He added that the high treasury bills rate implies that the bank leveraged on the opportunities created in the treasury market through higher returns without lending, and that the approach was perceived to be unhealthy to an economy that was getting out of recession.

He furthered that the bank’s operations have increasingly been constrained over the past four years due to the introduction and enforcement of policies and guidelines by the Bank of Sierra Leone that have negatively impacted credit expansion and profitable investment opportunities.

He said the guidelines imposed an upper limit of 300% of the bank’s capital base on the bank’s total loan exposure, adding that the bank was unable to take advantage of the credit opportunities in the market due to fiscal constraints.

He said the bank’s management made a proposition to the Governor of Bank of Sierra Leone for increase in the aggregate exposure limit to 500% of commercial bank’s capital base, but that the proposal was declined by the Governor.

He said the bank needs to increase its capital base in order to increase capacity to expand in business acquisition without violating the regulatory requirement.

“We understand a revised Banking Act is currently being reviewed by the Parliament and it is hoped that some of these constraints will be addressed,” he said.

He said that in order to support government’s reconstruction programme, they were the first to pioneer the currency SWAP in June last year while many other banks followed the initiative.

Chairman Taylor-Lewis maintained that to enhance the financial inclusion initiative of the Bank of Sierra Leone, GTBank forwarded a proposal to BSL for the relaxation of identification requirement under the three tier risk base KYC identification policy, adding that BSL has adopted the proposal.

In the area of corporate social responsibility, he said the bank spent Le228, 772,666.67 during 2017 on various developmental projects with the aim of giving back to society.

He added that in February 2017, the bank embarked on the renovation of Kenema Government Secondary School and in June of the same year they also renovated St. John Primary School in Freetown.

He disclosed that in September 2017 the bank also donated Le150 million cash, excluding foodstuff supplies to the disaster relief fund as support to the August 14th 2017 mudslide and flooding disaster victims.

He concluded by revealing that the bank made profit before tax of Le66.09 billion in 2016, representing approximately 22.8% growth in profit against 15.1% growth recorded.

He added that the bank’s profit after tax grew to Le46.15 billion, up from Le37.66 billion, representing 22.54% growth as against 15% growth recorded in 2016, adding that the bank’s total assets increased to Le859.98 billion, up from Le753.17 billion, achieving 14.18% growth recorded in 2016.